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#1099537 - 12/18/08 04:51 PM Rec CC - all checks local?
Anonymous
Unregistered

It is my understanding that by the end of 2009, all check clearing districts will be consolidated into one.

Does this mean that all checks will be local?

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#1099635 - 12/18/08 05:53 PM Re: Rec CC - all checks local? Anonymous
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Yes, it does.
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#1099846 - 12/18/08 08:56 PM Re: Rec CC - all checks local? Skittles
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Yep. Strange, isn't it. Although this will make Reg CC training much easier.
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#1099890 - 12/18/08 09:30 PM Re: Rec CC - all checks local? David Dickinson
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David - do you see Reg CC (holds) going away sometime in the next couple of years?
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#1099933 - 12/18/08 09:59 PM Re: Rec CC - all checks local? Skittles
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I don't think they'll go away from a regulation standpoint, but if everything is a local check, the benefit to the bank is minimal. 2 days is a joke (CBC holds) and 5 days isn't much (Exception holds).
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#1099990 - 12/18/08 10:48 PM Re: Rec CC - all checks local? David Dickinson
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The upside is that progress in automation (electronic cash letters and automated returns) will help us learn more quickly the checks that are being returned to us. Training will need to re-focus to those back offices receiving return notices for exception hold placement (if you haven't already).
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#1100043 - 12/19/08 01:59 AM Re: Rec CC - all checks local? BrendaC
RR Sarah Offline
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We had an interesting situation a couple of weeks ago. We had a customer deposit a $3000 check and we placed a CBC hold on the check for 5 days. The check was returned to us as fraudulent but the other bank did not send the large item return notification. The hold was scheduled to be released the day the check was returned to us. We contacted our account representative at the FRB and he told us that the large item return notification wasn't a requirement but merely a suggestion and that any recourse we might have would have to be accomplished through some sort of court proceedings. I am having a hard time swallowing that but just haven't had the time to pursue a further explanation. It is on my to do list though.
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#1100055 - 12/19/08 12:38 PM Re: Rec CC - all checks local? RR Sarah
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Uh David - aren't local exception holds 7 days, not 5?
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#1100118 - 12/19/08 02:32 PM Re: Rec CC - all checks local? Skittles
David Dickinson Offline
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Originally Posted By: Duchess Skittles
Uh David - aren't local exception holds 7 days, not 5?

You are correct. Thanks for catching that Skittles.
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#1100146 - 12/19/08 02:50 PM Re: Rec CC - all checks local? David Dickinson
Georgia Plum
Unregistered

RR Sarah, Reg CC 229.33 says


If a paying bank determines not to pay a check in the amount of $2,500 or more, it shall provide notice of nonpayment such that the notice is received by the depositary bank by 4:00 p.m. (local time) on the second business day following the banking day on which the check was presented to the paying bank. If the day the paying bank is required to provide notice is not a banking day for the depositary bank, receipt of notice on the depositary bank's next banking day constitutes timely notice. Notice may be provided by any reasonable means, including the returned check, a writing (including a copy of the check), telephone, Fedwire, telex, or other form of telegraph.

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#1100521 - 12/19/08 06:50 PM Re: Rec CC - all checks local?
RR Sarah Offline
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Thanks Georgia Plum. That explains it. This particular case (and another one that came up a week later) really frustrated me because attempts were made to contact the bank(s) to verify funds and we got nowhere. And it wasn't necessarily that we wanted to verify funds but more like we wanted to know that the checks were not fraudulent. We are all in the same boat and sometimes it seems like we are working against each other.
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#1100621 - 12/19/08 09:12 PM Re: Rec CC - all checks local? RR Sarah
Anonymous
Unregistered

Our district is restructuring at the end of Jan. and this change will be effective at the end of 2009 - it makes sense to me to just switch to all local by the end of Jan rather than making tellers learn new routing numbers only to change again at the end of the year.

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#1100622 - 12/19/08 09:12 PM Re: Rec CC - all checks local? RR Sarah
Anonymous
Unregistered

Our district is restructuring at the end of Jan. and this change will be effective at the end of 2009 - it makes sense to me to just switch to all local by the end of Jan rather than making tellers learn new routing numbers only to change again at the end of the year.
Thoughts?

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#1100885 - 12/22/08 04:06 PM Re: Rec CC - all checks local? Anonymous
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That large item notice is a requirement (that can be satisfied by the return of the check itself), and it has a deadline. When that deadline is missed, the depositary bank may have a case for damages under the regulation, but those damages only include losses and expenses the bank would have been able to prevent if the notice had been on time. In many cases, that's nothing at all, and often not enough to warrant dragging the paying bank into court to sue under the warranty. I imagine that's one reason that some paying banks have simply stopped making the notifications, figuring they're fairly well protected.
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#1109027 - 01/12/09 03:06 PM Re: Rec CC - all checks local? Anonymous
Anonymous
Unregistered

Originally Posted By: Anonymous
Our district is restructuring at the end of Jan. and this change will be effective at the end of 2009 - it makes sense to me to just switch to all local by the end of Jan rather than making tellers learn new routing numbers only to change again at the end of the year.
Thoughts?


Anyone want to chime in on this one?

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#1109178 - 01/12/09 05:15 PM Re: Rec CC - all checks local? Anonymous
Georgia Plum
Unregistered

Well, I guess if you're willing to take the regulatory risk that a hold could be placed as local when it should have been non-local or vice versa, then go ahead. And if you're willing to assume the financial risk of holds not being long enough, then go ahead. For us, as small as we are and very local, the risk would be minute, but if you are a larger bank the risk might be great.

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#1109438 - 01/12/09 08:58 PM Re: Rec CC - all checks local?
RR Joker Offline
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You'll not get into any regulatory trouble for holding less than allowed by law...but the risk may be greater.

With Check 21, most checks clear so much faster, it may be worth the risk to make the procedure easier for your bank...you just have to weigh the risk.
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#1109563 - 01/12/09 10:18 PM Re: Rec CC - all checks local? RR Joker
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The other potential risk for holding less than allowed is the appearance of preferential treatment.
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